Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Darling Ingredients's Sloan Ratio for the quarter that ended in Dec. 2023 was 12.87%.
As of Dec. 2023, Darling Ingredients has a Sloan Ratio of 12.87%, indicating there is a warning stage of accrual build up.
Darling Ingredients Sloan Ratio % Historical Data
The historical data trend for Darling Ingredients's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Darling Ingredients's Sloan Ratio %
For the Packaged Foods subindustry, Darling Ingredients's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Darling Ingredients's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Darling Ingredients's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Darling Ingredients's Sloan Ratio % falls into.
Darling Ingredients Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Darling Ingredients's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Darling Ingredients's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 185.801 (Mar. 2023 ) + 252.383 (Jun. 2023 ) + 125.026 (Sep. 2023 ) + 84.516 (Dec. 2023 ) = $648 Mil.
Darling Ingredients's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 188.426 (Mar. 2023 ) + 217.274 (Jun. 2023 ) + 276.588 (Sep. 2023 ) + 216.975 (Dec. 2023 ) = $899 Mil.
Darling Ingredients's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -1256.789 (Mar. 2023 ) + -91.576 (Jun. 2023 ) + -158.269 (Sep. 2023 ) + -168.818 (Dec. 2023 ) = $-1,675 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Darling Ingredients (NYSE:DAR) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, Darling Ingredients has a Sloan Ratio of 12.87%, indicating there is a warning stage of accrual build up.
Darling Ingredients Sloan Ratio % Related Terms
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Darling Ingredients (Darling Ingredients) Business Description
Darling Ingredients Inc develops and manufactures sustainable ingredients for customers in the pharmaceutical, food, pet food, fuel, and fertilizer industries. It collects and transforms all aspects of animal by-product streams into ingredients, including gelatin, fats, proteins, pet food ingredients, fertilizers, and other specialty products. Also, the company recovers and converts used cooking oil and bakery remnants into feed and fuel ingredients. Darling has three primary business segments: feed ingredients (the majority of revenue), food ingredients, and fuel ingredients. It provides grease trap services for food businesses and sells various equipment for collecting and delivering cooking oil. The company derives the majority of its revenue from customers in North America.
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